EU Green Rules Set to Boost Costs for Global Clothing Brands

New EU regulations on worker rights and emissions will raise costs for global clothing brands, impacting suppliers in low-income countries like Bangladesh. The directive mandates sustainable practices in global value chains, urging major brands to share the burden. Industry experts call for collaboration to meet the $1 trillion green transition investment.

New EU labour and climate regulations, set to be enforced, will inevitably escalate costs for global clothing brands and their suppliers, a new report indicates. The regulations, part of the EU's Corporate Sustainability Due Diligence Directive (CSDDD), mandate sustainable practices in global supply chains and place heightened responsibility on major international brands.

Suppliers in low-income countries like Bangladesh are urging global brands to share the financial and logistical burdens of these sweeping changes. Industry experts emphasize that corporations must collaborate closely with their suppliers to adhere to these stringent guidelines. This call for a unified approach comes as Bangladesh undergoes a significant political transition spurred by mass protests over a jobs crisis.

Transitioning to green practices is estimated to require a $1 trillion investment, and suppliers will likely need to secure new contracts and financial support to meet these costs. The directive also includes repercussions for failing to protect workers and communities, pushing for comprehensive compliance up and down the supply chain, according to the study backed by the Transformers Foundation and GIZ FABRIC.

(With inputs from agencies.)